HSBC is making moves to tackle climate change, unveiling five new commitments aimed at helping drive the transition to a low-carbon economy. A major component of the financial giant’s climate push is a pledge to make $100 billion in financing available for sustainability projects by 2025.
The UK-based bank has also committed to distancing itself from thermal coal by discontinuing financing of new coal-fired power plants in developed markets and of thermal coal mines. HSBC will also source 100 percent of its electricity from renewable sources by 2030 and adopt the recommendations of the Task Force on Climate-related Financial Disclosures.
“For more than a decade, HSBC has helped clients break new ground in the green bond markets in Europe and Asia and to finance some of the biggest climate-friendly infrastructure projects in the world. The $100 billion commitment that we are announcing today acknowledges the scale of the challenge in making a transition to a low-carbon future. We are committed to being a leading global partner to the public and private sectors as they make that transition,” said Stuart Gulliver, Group Chief Executive at HSBC.
The move builds on previous efforts made by HSBC to boost sustainable finance, something which investors are increasingly demanding. In recent years, the bank has been active in developing voluntary standards for issuers of green bonds and social bonds, issues its own €500 million green bond and won recognition for its research into climate change. Over the past year, HSBC has reduced its water usage by nine percent, carbon emissions by nine percent and energy consumption by 13 percent. It has also signed agreements with clean energy producers to source 24 percent of its electricity from renewable sources.
HSBC’s pledges mark a step in the right direction, yet, as Fortune writer Natasha Bach pointed out, they feel somewhat lackluster, particularly in terms of its coal commitment, which focuses on developed markets, where there exists very little incentive to build new coal-fired plants. Earlier this year, 26 European Member States pledged to put an end to the construction of new coal-fired plants after 2020. Demand for coal lies largely in developing markets, which leaves one feeling that the bank is seeking fanfare for essentially sticking to the status quo, at least in regards to this point. And in light of commitments from Deutsche Bank and Bank of America to cut coal financing across the board, it’s clear that HSBC could have done more to push the needle forward.